MYOB gains competitive advantage with completion of BankLink purchase

04 Jun 2013

Strengthens cloud accounting offering, product range, client footprint & partner channel

MYOB Finance NZ Limited announced today it has completed the purchase of New Zealand accounting solutions provider BankLink from Media Transfer Services Limited for NZ$136m. Signing of the purchase agreement was announced to the Australian Securities Exchange on 14 May 2013.

The deal marks a significant strategic move by MYOB within the cloud computing space, expanding its comprehensive offering of business management solutions and services for accountants and their clients.

The BankLink acquisition will:

  • Strengthen MYOB’s robust financial position. Both online accounting solutions companies deliver a high percentage of recurring revenue, strong and stable EBITDA margins and high cash flow conversion.
  • Boost MYOB’s share in its core markets of Australia and New Zealand. It serves nearly one million SMEs and 40,000 accountants (holding a 60-70% share of the small business accounting and public accountant markets), while BankLink serves 320,000+ small businesses and nearly 5,000 accounting firms.
  • Reinforce MYOB’s commitment to providing superior business solutions, particularly cloud-based applications. The synergy between MYOB’s wide range of quality online and desktop products and BankLink’s secure, accurate and reliable bank feeds from more than 100 financial institutions is key to delivering superior cloud offerings.

MYOB Chief Executive Officer, Tim Reed said the acquisition will drive tremendous value to clients and partners.

“Together, MYOB and BankLink have a distinct competitive advantage in delivering our cloud strategy. We now offer an even more comprehensive product suite, addressing the needs of micro businesses through to medium-sized enterprises. The acquisition strengthens the footprint of our business, further secures our market position and will contribute to the strong profit we make every year,” he said.

“Sales of AccountRight Live and LiveAccounts now account for one-third of all new MYOB product registrations. However, we recognise the unique needs of every SME by continuing to provide a full suite of both cloud and desktop accounting solutions.

“Bringing together two market-leading businesses enables us to strengthen our accounting industry relationships and to realise greater efficiencies and economies of scale in bringing a superior offering to market. We have received positive feedback from many accountants who see the benefits of the union. With MYOB’s sizeable investment in research and development, which was more than $29 million last year and will increase further this year, our vision is to deliver a fully integrated line-up to benefit all accountants and clients.

“All MYOB cloud accounting solutions will continue to be powered by BankLink bank feeds, including our flagship product AccountRight Live and popular entry-level product LiveAccounts. So too will BankLink’s leading accountants’ solution for delivering clients bank feeds to their accountants, BankLink Practice. BankLink’s bank feeds service will continue to integrate with other third party systems and it is business as usual.

“The accuracy of the BankLink bank feeds are unparalleled. Its team of data accuracy specialists closely reviews banks’ data feeds using processes built over 25 years of providing this service, meaning its feeds are even more reliable than banks’ own raw feeds. Importantly, BankLink also supplies secure bank transaction data via direct feeds without the client needing to disclose log-in details.

MYOB invested AU$29.3 million in research and development in 2012 and that will increase again in 2013. It will also invest an additional AU$5 million to fully integrate BankLink products into MYOB Accountants Office and Accountants Enterprise suites, and accelerate their move to online.

BankLink General Manager Operations, Richard Reese confirms the combined MYOB and BankLink offering will create a compelling market force, saying, “BankLink has enjoyed great success in the market for over 25 years. The completion of the acquisition is a key milestone for our team, network, and for the broader local accounting industry. It sees BankLink join MYOB, a highly reputable and well-performing company, to commence the next phase of growth. We are excited about the possibilities our two companies can achieve as a combined force.”

“Like BankLink, MYOB is committed to building deep relationships with its clients and partners, understanding their needs and working alongside them to provide a range of solutions to suit their specific needs. Together, we will be able to provide an even stronger focus on supporting accountants in practice.”

Matthew Jones of Jones Accounting Services Limited, said, “We’re firm believers of making life, and especially bookwork, as easy as possible for our clients which is why we started using MYOB software some 20 years ago. Then we embraced Banklink, which revolutionised the way we processed huge volumes of transactions, making both our firm and our clients more productive. We’re very excited about MYOB’s acquisition of Banklink, merging what we believe is the best of both client and accountants’ software. We’re looking forward to greater efficiencies and an even more productive future.”

The total purchase price of NZ$136m was funded by NZ$75m senior bank debt, with the balance funded by equity capital from MYOB's shareholder, which was raised via the retail note issuance in December 2012. Performance against senior bank debt and MYOB covenants improves as a result of the acquisition due to the reinvestment of NZ$61m of equity funding by MYOB's shareholder and the contribution of BankLink business earnings to MYOB's earnings.

Craig Boyce, Bain Capital Managing Director, said, “The impressive traction MYOB has gained in the cloud accounting market in recent times is further enhanced with this key strategic move. The acquisition propels MYOB into an unrivalled position of providing the most comprehensive offering of business accounting and accountant solutions. Bain is committed to supporting the MYOB team in making business life easier for their clients and realising the business’s growth potential.”


MYOB Media Contact

Elaine Koller, NZ Public Affairs Manager

+64 29 777 0256 |

Kristy Sheppard, AU/NZ Public Relations & Corporate Affairs Manager

+61 407 450 860 |

About MYOB Group

MYOB is a leading provider of business management, accounting, payroll and tax software in Australia and New Zealand, supplying its software, services and support to small and medium sized enterprises (“SMEs”) and public accountants. MYOB's solutions extend online, delivering innovation through cloud accounting solutions such as LiveAccounts and the recently launched AccountRight Live. This enables its clients to be more productive, supporting more streamlined connections with their staff, business partners, business advisors and customers. MYOB estimates it currently holds a market share of approximately 60–70% for SMEs and approximately 60–70% for public accountants, by revenue from sales of these products and services in Australia and New Zealand. MYOB believes clients value the ease of use, reliability, integrated nature, ongoing regulatory compliance updates and client support services that it provides. MYOB commenced operations more than 20 years ago and now supports nearly 1 million businesses, predominantly SMEs, and more than 40,000 accountants across Australia and New Zealand. MYOB employs more than 900 staff and is headquartered in Melbourne, Australia. For the 12 months ending 31 December 2012, the MYOB Group generated $218.1 million in revenue, $107.5 million in covenant EBITDA ($27.3 million NPATA and a NPAT loss of $14.8 million) and a covenant EBITDA margin of 49.3%. Funds advised by Bain Capital became the majority owner of the MYOB Group in September 2011. Bain Capital has a significant history of advising on investments in software and business services companies globally.

About BankLink

BankLink, as part of the Media Transfer Services (MTS) company, was founded in 1986 in New Zealand by Malcolm MacDonald, Derek Jones and Steve Agnew. The original aim was to provide a time-saving service to accountants and their small business clients. For 25 years BankLink has been providing easy to use accounting solutions that deliver better efficiencies, improved communication, and increased profits for accounting practices and their clients. BankLink is an innovative service that automates and streamlines the accounting process. As a recognised market leader, BankLink is used by nearly 5,000 accounting practices, and more than 320,000 small businesses throughout New Zealand and Australia. BankLink securely delivers over 13 million customer transactions from over 100 banks, credit unions, brokers and fund managers. BankLink won the 2012 AUT excellence in Business Support Award, in the WHK Large Business $10 million to $50 million turnover category; the 'Most Innovative Approach to International Business' award by New Zealand Trade and Enterprise; and were a finalist in the PricewaterhouseCoopers 'Hi-Tech Company of the Year,' the 'International Business Wales Hi-Tech Exporter of the Year' awards, and the 2011 'NZ Hi-Tech Awards.'